In this paper, I empirically analyzed the effects of the increase in the size of a bank in Korea on SME loans and on the allocation efficiency of enterprise loans. The empirical results of this paper showed that, as the size of a bank in Korea became bigger, the ratio of SME loans to total loans in Korean banks lowered. Therefore, the government policy is necessary to supply funds to SMEs as Korean banks become more sizable nowadays. I also found that as the average size of banks in Korean banking sector became bigger, the allocation efficiency of enterprise loans by banks were largely improved. Especially, the empirical results of this paper showed that, as the average size of Korean banks became bigger, more amount of loans were allocated to industries with higher profitability, more financially soundness and more ability in bearing financial cost. However, it was found that sizable banks in Korea usually failed in allocating more loans to more productive industries. Thus, government policy is needed in this part.